Construction workers rebuild a home in the Lakeview area of New Orleans on Aug. 14. Surveys show 47 percent of Lakeview residents have returned after Hurricane Katrina and another 23 percent are working on their homes.

New Orleans ? Two years after Hurricane Katrina, much of the “city that care forgot” still lies in ruins. But Otis Biggs’ task as he shuffles his Tarot deck this moist August day is to peer into the future to 2015, the storm’s 10th anniversary.

Rings of silver and turquoise flash as one card, then another flops onto a zodiac-patterned table in the incense-perfumed Bottom of the Cup Tea Room in the French Quarter, where the diminutive Biggs has been telling fortunes for 32 years.

An upside down tower – violent storms will hold off until levees are repaired.

The ace of cauldrons – money will flow.

The empress – stability, fruitful things.

Downtown, near the riverfront, Biggs sees a gleaming glass and steel tower rising, the tallest in the state. Elections will bring new blood and vision. Companies will feel safe to invest in the city, and most of those who fled will return.

“There’s hope,” Biggs says, his hazel eyes twinkling in light reflected through a crystal ball.

Challenges ahead

There may be hope, but there are few assurances for the recovering Big Easy.

“For every positive that’s going on in New Orleans right now, there’s a negative, there’s a concern,” says Reed Kroloff, who until recently was dean of the school of architecture at Tulane University.

The failure of federally funded, state-administered recovery programs to quickly take hold, and the city’s struggle to define and fund plans for neighborhood redevelopment, have shaken confidence about New Orleans’ short-term future. Mayor Ray Nagin favors a “market-driven” recovery of the city. Critics say he has not made the tough decisions necessary to get planning for the city’s future moving into high gear.

New Orleans still struggles with corruption. A congressman is under indictment, a senator has been implicated in a sex scandal and a city councilman thought to be a favorite as New Orleans’ next mayor pleaded guilty in August to federal bribery charges and resigned.

There are geophysical challenges ahead, too. By 2015, parts of New Orleans will have subsided nearly an additional 8 inches. The city filled up like a bowl when Katrina broke levees on Aug. 29, 2005. Roughly 240 more square miles of the eroding wetlands that protect the city from storm surge will be gone by 2015.

If the Army Corps of Engineers has its way, and billions in federal funds don’t get siphoned off by war or another natural disaster, those who remain should be better protected from flooding by 2015.

To the east, a massive levee-and-floodgate structure rising out of the brackish marsh should block the surge from the Gulf Intracoastal Waterway and the Mississippi River-Gulf Outlet, or MR-GO. To the north, new flood gates and pumping stations would prevent a surge from Lake Pontchartrain and prevent a repeat of the failures along the city’s drainage canals.

Population shift

The city’s population will be smaller a decade after the storm. A recent estimate pegs the current population at around 270,000 – about 60 percent of the pre-Katrina total.

Rich Campanella, an urban geographer at Tulane, predicts that by 2015, the city’s population will be somewhere around 350,000. Blacks will still outnumber whites, but the margin will be significantly less.

He and others agree the city’s residents will be somewhat more affluent, the poor possibly being squeezed out by the increased expense of living in a hurricane zone.

And New Orleans could be a city with a younger population.

“Not because there are more children,” says Campanella, associate director of the Center for Bioenvironmental Research at Tulane and Xavier universities. “Being elderly and in need of health care in this city might inspire many older people to relocate.”

Health care challenges and the dearth of affordable housing will continue to influence the pace of recovery.

Nearly half of the hospitals open in the parish before Katrina remain closed, and one is a shell of its former self. The remaining hospitals serving the city lost a combined $56 million in the first five months of 2007, and the projected operating loss for the year is $135 million, says Leslie Hirsch, who took over Touro Infirmary a week before Katrina.

If major changes aren’t made, such as drastic increases in Medicaid and Medicare reimbursement, the city’s hospitals will continue to hemorrhage money, says Hirsch, who worries there will be even fewer choices for care.

Housing

Before Katrina, many locals rented homes – garrets in the French Quarter, wings of faded mansions Uptown, shotgun homes in Bywater. For the impoverished, sprawling public housing projects offered shelter to more than 5,000 families.

But Katrina closed four-fifths of that subsidized housing.

The U.S. Department of Housing and Urban Development wants to demolish four of the biggest housing projects and turn them into Norman Rockwellian mixed-income neighborhoods. That plan has met with fierce opposition from housing advocates who fear the poor would lose their foothold.

And there’s little prospect New Orleans will become the renter’s paradise it once was.

The back wall of the city council chamber is lined with architectural renderings of mixed-income, multi-family developments. That is the future planned for the eight-story brick Falstaff brewery, where pigeons now roost and graffiti artists leave their marks.

But so far, those plans are little more than wrinkled drawings.

The city’s neighborhoods are repopulating, with and without government aid. But it is a patchwork redevelopment that favors those of means.

In the predominantly black Lower 9th Ward, the city’s poorest neighborhood, streetlights are back on and water is flowing. But while there are houses being repaired here and there, and even some innovative solar power projects being instituted, there are vast stretches of empty, weed-choked lots and rooftops still covered in storm debris.

In mostly white Lakeview, where water levels topped 10 feet in some areas, things are booming.

Harrison Avenue, the main business strip, is fairly buzzing with banks, restaurants, even a Starbucks. Medians once strewn with debris and rotting garbage are now blooming again with crepe myrtles.

Surveys show 47 percent of Lakeview residents have returned, and another 23 percent are working on their homes. Freddy Yoder, a recovery contractor, has not only refurbished his 11-year-old brick Queen Anne Victorian-style home, but he’s purchased several other lots in the neighborhood.

“I work with the Corps of Engineers. I go to their projects and I see what actions are being taken,” he says. “And I am thoroughly convinced that if we’re not there yet we’re very close to being in a very safe environment and a very safe place to live.”

Industry and employment

Tourism is a bittersweet bright spot. The French Quarter survived Katrina, and the music and restaurant scenes continue to rebound. Some musicians are still missing in action. But Jazz trumpeter Kermit Ruffins, a co-founder of the renowned Rebirth Brass Band, says he and friends are busy as ever.

“It’s just so wonderful to be alive and swinging in New Orleans,” he says. “We’re going to be buried here, man. That’s for sure. That’s for DAMN sure.”

Most of the city’s signature restaurants – Brennan’s, Emeril’s, Commander’s Palace – have reopened.

A 70-story Trump hotel and condominium tower is planned for the central business district.

“There will be a Trump Tower,” Cliff Mowe, one of The Donald’s co-developers, said last week during a visit to the city for meetings with project attorneys and real estate people.

The building is not scheduled for completion until 2010, but Mowe says developers have received several hundred reservations and deposits from prospective tenants – many for units costing nearly $2 million.

But as millionaires stake out lofty digs, the city continues to bleed jobs. Tourism is notoriously poor-paying. There are huge questions about where thousands of good-paying jobs needed to sustain the city’s rebound will come from.